MNI DATA REACT: TEXT: StatsCan Release on March Flash GDP

By Greg Quinn

     OTTAWA (MNI) - Following is the text of Statistics Canada's release

Wednesday of a flash GDP estimate for March:

     The gross domestic product (GDP) is a core economic measure of the health

of the Canadian economy. Typically, Statistics Canada releases these data about

two months after the end of the reference period. The most recent monthly

release, for instance, highlighted GDP for the January reference month.

     Given the unique situation faced by the Canadian economy in the context of

the COVID-19 pandemic and the demand for trusted information on the aggregate

impact of this health crisis on the economy, Statistics Canada has produced a

flash estimate of monthly GDP for March. This measure is an approximation of the

scale of economic disruption resulting from the deliberate actions taken to

protect the health of Canadian citizens.

     Normally, Statistics Canada uses a complete set of survey and

administrative data when compiling monthly GDP. Estimates for the March

reference month would be based on actual data for that same reference month from

source programs across the Agency that cover all industries. Under these

exceptional circumstances, these same programs have made use of all of the

information they have at hand to produce this special flash monthly GDP.

     These estimates should not be expected to have the same quality as

Statistics Canada's official estimates of GDP and should be seen as a tool to

inform users of the change in GDP. These estimates will change once more actual

data is used in the compilation of these estimates in May.

     The flash estimate for GDP indicates a decline of approximately 9% in

March. Even though the basis of calculation is different, in a relative sense,

this would be the largest one-month decline in GDP, since the series started in

1961. Overall for the quarter, this flash estimate of GDP leads to an

approximate decline of 2.6% for the first quarter of 2020.

     Economic disruptions have been both deep and widespread in the month of

March. Among the hardest hit by social distancing measures and government

restrictions have been the travel- and tourism-related industries, such as

personal transportation, restaurants and accommodation. Major declines have also

occurred in personal services, retailing (other than food), entertainment and

sporting events, and movie exhibition. Working from home and distance learning

have been growing trends across society, however, due to the suddenness and

breadth of the shutdowns of government and education facilities, the volume of

output in these sectors, based on actual hours worked, is calculated to decline

dramatically.

     Not all sectors of the economy declined in March. Activity in the health

sector, food distribution and online retailing and streaming have been growing.

Despite the collapse in oil prices and the pullback in the sector's investment

activities, early indications seem to show that the volume of oil and gas

extraction and pipeline transportation had not yet been substantially impacted

in March as storage facilities were still being filled.

     Note to readers This flash estimate is a special product which is being

specifically published in the context of the COVID-19 pandemic with the intent

to provide Canadians with timely information on the potential impact of the

present health crisis on the Canadian economy. This product will likely be

subject to future revisions since more precise and official estimates will be

published by Statistics Canada as more information on economic activities

becomes available. In the meantime, the Agency has developed this flash estimate

based on methodology that combines qualitative and quantitative information such

as existing statistical data; publicly released facts, including media releases

and general public statements by businesses and governments.

     The official estimate of gross domestic product for the month of March,

which will be based on a more complete set of surveys of businesses, households

and governments and administrative databases is scheduled for release on May 29,

in accordance with usual timelines. As noted above, given the differences in

methodology, discrepancies between these flash and official estimates are

possible. Only when the official estimates are released will we know the extent

of the possible differences in the estimates.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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